LONDON (Reuters) - A senior banker, who says he was fired for being too successful, is taking his 12.5 million euro-plus ($16 million) lawsuit against France’s Societe Generale (SOGN.PA) to the UK’s highest court in a case that could re-draft employment law.
Raphael Geys, a Belgian national and a former managing director of SocGen’s European fixed income sales in London, is suing for breach of contract after France’s second-largest bank summarily fired him in 2007 without paying his full severance package.
The case might not muster much public sympathy at a time of political and regulatory anger at rich banker rewards and a culture of greed in a scandal-hit industry that only stayed afloat because of huge taxpayer bailouts.
But the case, to be heard by the Supreme Court on Wednesday and Thursday, is being watched closely by employment lawyers because it will partly focus on whether one-off payments to fired staff in lieu of a written notice period — so-called PILONs or payments in lieu of notice — constitute the end of a contract if paid without notifying staff.
“This case raises issues of significant importance concerning the termination of employment contracts — the Supreme Court’s judgment is likely to be of considerable interest to employees and employers alike,” said Tom Custance, from UK law firm Fox Williams, who is representing Geys.
The five Supreme Court judges are not expected to make any judgment for some weeks, although lawyers are hoping for a decision before Christmas.
SocGen originally offered Geys — who says gross revenues at his division more than doubled between 2005 and 2007 to around 440 million euros — 7.9 million euros to cover contractual termination payments.
But when he refused the offer, the bank withdrew it, arguing his decision to sue meant he was no longer entitled to the deal under his former contract.
Geys, who earned an annual basic salary of 150,000 pounds ($240,800), says he only received formal notification in 2008 that a payment of around 32,000 pounds ($51,400), paid into his bank account by SocGen in 2007, constituted a PILON.
He says he should be entitled to a year-end bonus for 2007 as well as bespoke and significant compensation for the termination of his contract.
He alleges his boss Fred Desclaux told him when he was fired on November 29, 2007 that he had to terminate Geys because “I was too expensive and would remain too expensive in 2008” due to the remuneration formula in his employment contract.
The High Court ruled in favor of Geys in 2010, awarding him around 12.5 million euros. But SocGen’s decision to go to the Court of Appeal saw around 2 million euros knocked off the severance package.
The Appeal Court judge disagreed with his High Court peers over when Geys’s contract had been terminated.
A spokesman for SocGen in London declined to comment.
The last high-profile case brought against a bank in Britain by financiers based here was heard in June.
Commerzbank (CBKG.DE), Germany’s second-largest bank, is attempting to overturn an English court decision that forces it to stump up around 52 million euros in unpaid bonuses to a group of 104 London-based investment bankers.
Commerzbank has been bailed out by German taxpayers twice. ($1 = 0.7730 euros) ($1 = 0.6230 British pounds)
Editing by David Cowell